DEPENDENCE
ON KEY PERSONNEL RISK. The Sub-Advisor is
dependent upon the experience and expertise of the Fund's portfolio managers in
providing advisory services with respect to the Fund's investments. If the
Sub-Advisor were to lose the services of any of these portfolio managers, its
ability to service the Fund could be adversely affected. There can be no
assurance that a suitable replacement could be found for any of the portfolio
managers in the event of their death, resignation, retirement or inability to
act on behalf of the Sub-Advisor.
ISSUER
SPECIFIC CHANGES RISK. The value of an
individual security or particular type of security can be more volatile than the
market as a whole and can perform differently from the value of the market as a
whole.
LEGISLATION/LITIGATION
RISK.
From time to time, various legislative initiatives are proposed in the United
States and abroad, which may have a negative impact on certain companies in
which the Fund invests. In addition, litigation regarding any of the issuers of
the securities owned by the Fund, or industries represented by these issuers,
may negatively impact the value of the securities. Such legislation or
litigation may cause the Fund to lose value or may result in higher portfolio
turnover if the Sub-Advisor determines to sell such a holding.
Fund
Organization
The
Fund is a series of the Trust, an investment company registered under the 1940
Act. The Fund is treated as a separate fund with its own
investment objectives and policies. The Trust is organized as a Massachusetts
business trust. The Board is responsible for the overall management and
direction of the Trust. The Board elects the Trust’s officers and approves all
significant agreements, including those with the Advisor, Sub-Advisor,
distributor, custodian and fund administrative and accounting
agent.
Management
of the Fund
First
Trust Advisors L.P., 120 East Liberty Drive, Wheaton, Illinois 60187, is the
investment advisor to the Fund. In this capacity, First Trust is
responsible for the selection and ongoing monitoring of the securities in the
Fund’s portfolio and certain other services necessary for the management of the
portfolios.
First
Trust is a limited partnership with one limited partner, Grace Partners of
DuPage L.P., and one general partner, The Charger Corporation. Grace
Partners of DuPage L.P. is a limited partnership with one general partner, The
Charger Corporation, and a number of limited partners. The Charger Corporation
is an Illinois corporation controlled by James A. Bowen, the Chief Executive
Officer of First Trust. First Trust discharges its responsibilities subject to
the policies of the Fund.
First Trust serves
as advisor or sub-advisor for 9 mutual fund portfolios, 10 exchange-traded funds
consisting of 201 series
and 14 closed-end funds. It is also the portfolio supervisor of certain unit
investment trusts sponsored by First Trust Portfolios L.P. (“FTP”), an affiliate of First Trust, 120
East Liberty Drive, Wheaton, Illinois 60187. FTP specializes in the
underwriting, trading and distribution of unit investment trusts and other
securities. FTP is the principal underwriter of the shares of the
Fund.
The Trust, on behalf
of the Fund, and First Trust have retained Cboe Vest Financial LLC to serve as
investment sub-advisor pursuant to a sub-advisory agreement
(the "Sub-Advisory
Agreement"). In this
capacity, Cboe Vest is responsible for the selection and ongoing monitoring of
the securities in the Fund’s investment portfolio. Cboe Vest, with principal
offices at 8350 Broad St., Suite 240, McLean, Virginia 22102, was founded in
2012, and is a Delaware LLC. Cboe Vest had approximately $10.1 billion under
management or committed to management as of December 31, 2022.
The Sub-Advisor is a
subsidiary of Cboe Vest Group, Inc. (“Cboe
VG”). First Trust
Capital Partners, LLC (“FTCP”), an affiliate of First Trust, is
the largest single holder of voting shares in Cboe VG. The remaining voting
shares of Cboe VG are owned by Cboe Vest, LLC, a wholly-owned subsidiary of Cboe
Global Markets, Inc., and certain individuals who operate Cboe VG and the
Sub-Advisor. Cboe VG was organized in 2012. Cboe® is a registered trademark of Cboe
Global Markets, Inc. VestSM is a service mark of Cboe
VG.
Karan
Sood and Howard Rubin are the Fund’s portfolio managers and are jointly and
primarily responsible for the day-to-day management of the
Fund’s investment portfolios.
•
Mr. Sood has over ten
years of experience in derivative based investment strategy design and trading.
Mr. Sood joined Cboe Vest in June 2012. Prior to joining Cboe Vest Mr. Sood
worked at ProShares Advisors LLC. Prior to ProShares, Mr. Sood worked as a Vice
President at Barclays Capital. Last based in New York, he was responsible for
using derivatives to design structured investment strategies and solutions for
the firm’s institutional clients